A low CIBIL score often becomes a major obstacle for individuals trying to obtain a credit card or loan. Many first-time borrowers, students, and people with limited credit history struggle to qualify for traditional credit cards because banks prefer applicants with strong repayment records.
However, a new solution is making credit access easier. A fixed deposit (FD)-backed credit card launched through a partnership between SBM Bank India and Paisabazaar allows eligible customers to obtain a credit card even without an excellent credit score.
The product is designed to help users build or improve their credit profile while enjoying the benefits of a credit card.
What Is an FD-Backed Credit Card?
An FD-backed credit card, also known as a secured credit card, is issued against a fixed deposit maintained with a bank.
Unlike regular credit cards, which are approved primarily based on income and credit history, secured credit cards use the fixed deposit as collateral. Since the deposit reduces the bank's risk, approval becomes easier for applicants with low or limited credit scores.
This makes such cards particularly useful for people who are beginning their credit journey.
Start With Just ₹2,000
One of the most attractive features of this offering is the low entry requirement.
Customers can reportedly open a fixed deposit with as little as ₹2,000 and become eligible for the credit card.
Key Highlights
- Minimum FD requirement: ₹2,000
- Credit card issued against the deposit
- Easier approval compared to unsecured cards
- Suitable for individuals with low or no credit history
This allows users to access credit facilities without making a large financial commitment.
How Much Credit Limit Can You Get?
In most cases, the credit limit offered on a secured credit card is linked to the value of the fixed deposit.
Typically:
- Credit limit can be up to 90% of the FD amount
For example, if a customer creates a fixed deposit of ₹10,000, the available credit limit may be approximately ₹9,000, depending on the issuer's policies.
This approach helps users learn responsible credit management while minimizing risk for the bank.
Continue Earning Interest on Your Savings
Another advantage of FD-backed credit cards is that the fixed deposit continues to earn interest while serving as security for the card.
According to reports, customers may earn interest of up to 7% annually on their deposit, depending on the applicable FD rates.
This means users can:
- Build their credit history
- Keep their savings intact
- Earn interest on the deposited amount
The arrangement provides both financial discipline and credit-building opportunities.
How Can This Help Improve Your CIBIL Score?
Responsible use of a secured credit card can gradually strengthen a person's credit profile.
Best Practices for Building Credit
- Pay credit card bills on time.
- Avoid missing payment due dates.
- Maintain low credit utilization.
- Use the card regularly but responsibly.
- Pay outstanding balances promptly.
Credit bureaus monitor repayment behavior, and consistent discipline can help improve a CIBIL score over time.
A stronger score may later increase eligibility for:
- Personal loans
- Home loans
- Vehicle loans
- Premium unsecured credit cards
What Is a CIBIL Score?
A CIBIL score is a three-digit numerical representation of a person's creditworthiness.
It reflects how responsibly an individual has handled credit in the past, including:
- Loan repayments
- Credit card payments
- Outstanding debt
- Credit utilization patterns
Banks and financial institutions use this score to evaluate the risk associated with lending money.
Generally, a higher score improves the chances of approval for credit products and may also result in better interest rates.
Who Should Consider an FD-Based Credit Card?
This type of card may be particularly useful for:
People With Low CIBIL Scores
Individuals who have faced difficulties obtaining traditional credit cards due to poor credit history.
First-Time Credit Users
Those who have never taken a loan or used a credit card before and therefore lack a credit record.
Students
Young adults seeking their first credit card and looking to establish a credit profile early.
Young Professionals
Newly employed individuals who want to build a strong financial track record.
Anyone Looking to Improve Creditworthiness
Users aiming to rebuild or strengthen their credit score through disciplined financial behavior.
A Smart Way to Build Credit
For many consumers, securing a credit card can be difficult without an established credit history. FD-backed credit cards offer a practical alternative by combining savings with credit-building opportunities.
By starting with a small deposit and maintaining responsible repayment habits, users can gradually improve their CIBIL score while enjoying the convenience of a credit card. For individuals with limited credit experience or a low credit score, this approach can serve as an effective first step toward stronger financial health and greater access to future borrowing opportunities.
